© 2006, CareVariance Information as Waste Treatment Physician Practice Efficiency Mark C. Rattray,...

© 2006, CareVariance

Information as Waste Treatment

Physician Practice Efficiency

Mark C. Rattray, MDPresident

CareVariance

Presentation to the Consumer-Purchaser Disclosure Project

September 29, 2006

2© 2006, CareVariance

A Chilling but Accurate Quote

“There are some patients that we cannot help; there are none that we cannot harm.”

Attributed to Arthur L. Bloomfield, MD, ca 1933 by Michael Millenson, in

“Demanding Medical Excellence; Doctors and Accountability in the Information Age.”

3© 2006, CareVariance

Inefficiency is Harmful

• Unneeded care carries risks• Unneeded care leads to more unneeded care• Unneeded care creates family and societal

distress• Waste impacts affordability

• Waste in health care resources – misuse and overuse

• Waste in health care administration resources – manual vs. automated

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Why now?

• Terabytes are much cheaper• Processor speed increased• Analytical tools improved• The outcry over high costs, errors and

lackluster quality is getting louder and broader in representation

• Other industries routinely measure performance in order to improve

• Our industry, with direct impact on human lives, is late to the party (although proposed in 1914)

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And the point is…

Information as Waste Treatment

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0.00

0.20

0.40

0.60

0.80

1.00

1.20

1.40

1.60

1.80

2.00

0.00 0.20 0.40 0.60 0.80 1.00 1.20 1.40 1.60 1.80 2.00

Efficiency Index (higher is better)

Qu

alit

y In

dex

(h

igh

er i

s b

ette

r)

Each Point on This Graph Represents a Physician

Which Ones Would You Prefer to See?

Rattray MC, Andrianos J, Stam DT. Used with the permission of The Regence Group, Copyright 2006. All rights reserved.

7© 2006, CareVariance

From Units of Care to Episodes of Care

• Unit Resource Management• Unit cost and frequency• Goal: reduce unit cost and frequency – “utilization

management”• Less care is better

• Episodic Resource Management• Recognizes that resource use mix unique to

condition• Goal: optimize mix of resources for most effective

care• The right amount of care is better

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How is the Episode Information Captured?

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Through the Data Required for Payment

NDC NumberEach listed drug product listed is assigned a unique 10-digit, 3-segment number.  This number, known as the NDC, identifies the labeler, product, and trade package size.  The first segment, the labeler code, is assigned by the FDA.  A labeler is any firm that manufactures (including repackers or relabelers), or distributes (under its own name) the drug. The second segment, the product code, identifies a specific strength, dosage form, and formulation for a particular firm. The third segment, the package code, identifies package sizes and types. Both the product and package codes are assigned by the firm. The NDC will be in one of the following configurations: 4-4-2, 5-3-2, or 5-4-1.

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ICD-9 Codes for Diagnosis

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CPT® and Revenue Codes for Services

Revenue Code

Description

111 Room and Board – Private, Medical/Surgical/Gynecological

112 Room and Board – Private, OB

113 Room and Board – Private, Pediatric

114 * Room and Board – Private, Psychiatric

117 Room and Board – Private, Oncology

118 Room and Board – Private, Rehabilitation

119 Room and Board – Private, Other

121 Room and Board – Semiprivate 2 Bed, Medical/Surgical/Gynecological

122 Room and Board – Semiprivate 2 Bed, Obstetric

123 Room and Board – Semiprivate 2 Bed, Pediatric

124 * Room and Board – Semiprivate 2 Bed, Psychiatric

127 Room and Board – Semiprivate 2 Bed, Oncology

128 Room and Board – Semiprivate 2 Bed, Rehabilitation

129 Room and Board – Semiprivate, 2 Beds, Other

131 Room and Board – Semiprivate 3 or 4 Bed, Medical/Surgical/Gynecological

CPT is a trademark of the American Medical Association

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HCPCS for Injectables and Supplies

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NDC Codes for Medications

What are the NDC Number and the National Drug Code Directory?

• The Drug Listing Act of 1972 requires registered drug establishments to provide the Food and Drug Administration (FDA) with a current list of all drugs manufactured, prepared, propagated, compounded, or processed by it for commercial distribution.  (See Section 510 of the Federal Food, Drug, and Cosmetic Act (Act) (21 U.S.C. § 360)).

• Drug products are identified and reported using a unique, three-segment number, called the National Drug Code (NDC), which is a universal product identifier for human drugs.  FDA inputs the full NDC number and the information submitted as part of the listing process into a database known as the Drug Registration and Listing System (DRL).

• Several times a year, FDA extracts some of the information from the DRLS data base (currently, properly listed marketed prescription drug products and insulin) and publishes that information in the NDC Directory.

14© 2006, CareVariance

Terabytes of Data Can Be Translated IntoLives Saved, Disease Reduced, and

Improved Affordability of Health Care!

NDC NumberEach listed drug product listed is assigned a unique 10-digit, 3-segment number.  This number, known as the NDC, identifies the labeler, product, and trade package size.  The first segment, the labeler code, is assigned by the FDA.  A labeler is any firm that manufactures (including repackers or relabelers), or distributes (under its own name) the drug. The second segment, the product code, identifies a specific strength, dosage form, and formulation for a particular firm. The third segment, the package code, identifies package sizes and types. Both the product and package codes are assigned by the firm. The NDC will be in one of the following configurations: 4-4-2, 5-3-2, or 5-4-1.

Data Warehouse

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An Episode of Care

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An Episode of Care by Cost “Buckets”

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Physician Compared to Peers

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Actionable Information for Physicians

Family Practice Physician: Net Variation from Peers Over a Two-year Period

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Source: http://www.symmetry-health.com

An Example of Episode Analysis

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Episode Efficiency Measurement and Reporting

Data Warehouse

Data Extraction

Grouper Software and Data

Expert Physician

and Analyst

Review of Grouper Results

Physician Provided

with Performance

Reports

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Physician Engagement and Practice Improvement

Physician Engagement

and Improvement

Physician Report

Support and Continuous

Measurement

Improvement

Appeal to Professionalism “Primum non

nocere”

Required Participation

Required Collaboration

Better Informed Decisions

Care Improves

Consumer Transparen

cy

Incentives (P4P)

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All ETG Applications Are Unique

Data,Dataprep

ETG Processing

Customized settings

Post Processing

Reporting• Very, very complicated

• Easy to make calculation error

• Lack of deep clinical and analytical domain expertise

• Not a black box; more like an elaborate maze, each one different

• Not originally designed for the rigorous demands of transparency

23© 2006, CareVariance

Groupers are Promising

• Episodic measurement makes sense

• Massive time and monetary investments have gotten us where we are

• Groupers aren’t going to go away

• Excellent tool for engaging physicians in practice variation discussions; learning from peers

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Groupers are Worrisome

• Are patient and disease variables adjusted for adequately so the output reflects performance?

• Are physician practices homogenous enough to create an acceptable peer group?

• Tendency to overreach the science to “tier” more physicians – inadequate sample size an example

• Most measuring entities under invest in provider education, collaboration, and clinical review of results before transparency occurs

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What Consumers Should Do?

• Support and advocate credible, sound, standardized, independently validated measurement

• Insist on “upward transparency” from the measurers – a full depiction of how measurement occurs and extent of third party validation

• Beware of glitzy health plan marketing, it’s the science that counts here

• Support electronic data initiatives. Measurement improves when the available amount of relevant electronic data increases

26© 2006, CareVariance

Information as Waste Treatment

Thank you